EC Trade Commissioner Pascal Lamy, in a declaration following the conclusion of the agreement, qualified the deal as a "balanced compromise between the interests of the diverse parties involved," but cautioned the agreement must now be endorsed by the EU Council of Ministers and the European Parliament.

The new system is scheduled to take effect on 1 July 2001, at which point the US will also suspend trade sanctions against the EU. The US will lift sanctions definitively once the accord is fully in place.

Under the agreement, EU import licenses will be allotted based on the way they were distributed during a 'historical reference period' of 1994-1996. The European Commission will also initiate the necessary procedures to propose to the EU Council of Ministers an adjustment to expand access for Latin American bananas and to secure a market share for a specific quantity of bananas of ACP (African, Caribbean, and Pacific) origin.

According to Pascal Lamy, the new scheme still guarantees ACP producers a share of the EU market, but would not contravene WTO rules. A special quota of 750 000 metric tons of ACP produced bananas -- a slightly smaller amount than the 850 000 metric tons proposed previously -- will still be reserved the right to enter the EU market free of duty.

Since quotas are being treated as a transitional measure, the EC will begin negotiations with main suppliers as mandated by WTO rules (Article XXVIII GATT) in time to introduce a flat tariff system ("tariff-only") in 2006. The Commission has also agreed to table the necessary proposals to the EU Council of Ministers and the European Parliament in order to fully implement the agreement as soon as possible.

German Economics Minister Werner Muller said the agreement, and the lifting of the sanctions, were positive signs for conciliation in EU-US relations. "This could have a positive influence on attempts to launch a new round of global trade liberalisation talks this year," he added.

For its part, Chiquita said it was pleased by the agreement, which it expected would lead to a "partial recovery" of the company's market opportunities in the 15-Nation EU. Chiquita, which currently faces bankruptcy, recently sued the European Commission for US$525 million in damages it said it had suffered due to EU banana restrictions. The historical reference period retained in the new proposal - 1994-1996 - is seen as benefiting Chiquita, which posted strong sales to Europe during that period.

Ecuador unhappy with new arrangement

While several small Caribbean growers and most Latin American officials and producers have pronounced themselves in favour of the new agreement, both Ecuador and Chiquita's rival Dole are fiercely opposed to the proposal.

Ecuador, the world's largest banana exporter, said on Tuesday 17 April that the EC-US plan contravened global trade rules, and Ecuadorian officials threatened to take the dispute back to the WTO if the EC didn't amend its proposals. In a statement from its Brussels mission to the EU, Ecuador accused the EU and the US of reaching the agreement behind its back and said aspects of the pact were in flagrant violation of WTO rules. "It is disconcerting...that the US and the EU...believe that their will can prevail over the principles of the multilateral trading system," the statement said.

In a letter to EC Trade Commissioner Pascal Lamy and Farm Commissioner Franz Fischler, Ecuador's Ambassador to the EU Alfredo Pinoargote said Ecuador would give the EU a chance to "rectify" its proposal. If it failed to do so, Ecuador would have no alternative but to ask for WTO consultations with the EU - the first stage in the global trade body's dispute settlement procedure, Pinoargote said.

Ecuador -- the world's largest exporter of bananas -- and Dole both backed "first come, first served" because they saw a chance to expand their exports to Europe. In a statement issued last week, Dole's chairman and chief executive David Murdock said the FCFS system would have been "the most pro free trade, open competitive system possible." Concerning the new deal, the statement claimed that "this action gives one company, Chiquita Brands International Inc., a dominant, fixed market share of the European Union's closed quota market, and continues to allocate licenses to protectionist European Union traders."

"To be legally valid, any agreement must win Ecuador's approval," Ecuador said Tuesday. It particularly faulted the new proposal for refusing access to the European market for new exporters from developing countries and advocated a return to the FCFS system. If that isn't possible, Ecuador Agriculture Minister Galo Plaza Pallares said Monday, Ecuador wants the reference period moved to 1995-1997, when the Andean Community exported more bananas to Europe.

In response to transparency concerns, the leaders noted in the Declaration that they would make public the preliminary draft of the FTAA Agreement, though no date was specified.

On environment, the Summit Declaration built upon the results of the Montreal Environmental Ministers meeting of the Americas, where discussions between representatives of the environment authorities across the hemisphere focused on environmental management; environment and health; and biodiversity protection across the hemisphere. Echoing this initiative, the leaders committed their governments to environmental protection and sustainable use of natural resources "with a view to ensuring a balance among economic development, social development and the protection of the environment".

But while leaders stated that their goal was to achieve sustainable development throughout the hemisphere, no explicit link was made between the environment or sustainable development and the FTAA itself. Existing sub-regional accords in the Americas promote sustainable development in different ways. For example, the North American Free Trade Agreement (NAFTA) between Canada, the US and Mexico contains side agreements on environment and labour that aim to promote these concerns in the context of the trade accord, and the Andean Community has a council of Environmental Authorities which is taking the lead on biosafety and intellectual property rights issues in the sub-region.

A Democracy connection

Government leaders also discussed the linkage between trade and democracy in the context of the forthcoming hemispheric trade accord. The Declaration contains a clause stressing that having a democratic government is a condition for participation in the Summit of the Americas process. Officials indicated that this would also apply to the FTAA, with the proviso that such efforts go hand-in-hand with increases in financial support for democracy through the Organisation of American States. The Southern Cone Common Market (Mercosur) -- comprised of Argentina, Brazil, Paraguay and Uruguay -- contains a democracy clause excluding any Mercosur member from the trade grouping should it fail to meet certain democratic norms.

estment provisions figure in FTAA text

A draft FTAA text on investment leaked to the public on 19 April indicates that the forthcoming trade agreement may contain strong investor-rights language. Although the text appears entirely in brackets -- denoting specific language yet to be finalised -- it confirms many civil society groups' fears that the FTAA investment provisions will closely resemble those found in NAFTA's Chapter 11. NAFTA's investor-state Chapter has been used in several instances by foreign investors to challenge domestic regulation in the three NAFTA parties, including environmental regulation (see BRIDGES Weekly, 20 February 2001).

Concerns that a finalised FTAA will generate a similar result have led many non-governmental organisations within the region to demand that governments rethink the logic behind the investment provision. According to Canada-based International Institute for Sustainable Development (IISD) Senior Advisor Aaron Cosbey, "Certainly we strive for increased investment and economic growth, but we also want environmental integrity, human health and safety and scores of other non-economic goals. The problem with the Chapter 11 cases to date is the [NAFTA] tribunals have been unable to find that kind of balance. They've promoted increased investment, but with terrible consequences for the environment."

Governments plan to start talks on removing regional trade barriers in May next year and to conclude an FTAA agreement by January 2005. The accord would come into force by the end of that year. The free trade area would be the world's largest trade grouping, with 800m people and a third of world economic output. The next Americas Summit will take place in Argentina.

Ecuador was initially unhappy with the EC-US deal, citing concerns about decreasing European market shares for its producers and threatening to take the dispute back to the WTO if the EC did not change certain aspects of the import licensing system. But in discussions between the two parties last week, Ecuador said it sought assurances that its operators would be able to obtain import licenses under the EC system's "newcomer" category.

The EC - Ecuador agreement, contained in an 'Understanding' (available here), provides Ecuadorian producers with a sizeable part of the 17 percent of the market reserved for newcomers. In return, the DSB will eventually withdraw the authorisation Ecuador has to impose trade sanctions against the EC. Quito will also lift its opposition to a WTO waiver requested by the EC to implement a preferential tariff quota for African, Caribbean and Pacific (ACP) countries signatory to the Cotonou preferential trade arrangement. Ecuador has also engaged itself to work actively to secure acceptance of a second EC request for the necessary WTO authorisation.

For their part, Caribbean countries generally welcomed the EC-US agreement, but voiced concern that the transition period to a flat tariff system in 2006 is too short in order for them to complete the restructuring of their banana-export based economies.

For its part, US Trade Representative Robert Zoellick has said that the US challenge is not meant as an attack on Brazilian public health policy, but rather to ensure that the rights of all US patent holders -- not simply pharmaceutical producers -- are not violated. According to Zoellick, by conditioning the benefit of exclusive patent rights on local production, Brazil's Article 68 discriminates against US patent holders with production capacity outside of Brazil and therefore violates Article 27.1 of the WTO's Agreement on Trade Related-Aspects of Intellectual Property Rights (TRIPs).

As for the treatment of HIV/AIDS, the Section 301 report states that, "should Brazil choose to compulsory license anti-retroviral AIDS drugs, it could do so under Article 71 of its patent law, which authorises compulsory licensing to address a national health emergency, consistent with TRIPs, and which the US is not challenging." Compulsory licensing is a WTO-compatible measure whereby governments can permit the domestic use of a patent without the consent of the patent holder in certain cases.

Brazil upbraids UNAIDS

At a recent UN conference, Dr. Paulo Teixeira, Director General of Brazil's anti-HIV/AIDS programme, criticised UNAIDS, the UN Agency responsible for coordinating the fight against the virus, saying that not enough emphasis is placed on strategies to improve domestic access to antiretroviral HIV/AIDS medications. According to Teixiera, UNAIDS does not go far enough in specifying the types of treatment needed to address the HIV pandemic and instead chooses to emphasise policies such as disease prevention, a policy consistent with the USTR Section 301 report.

Of the Section 301 report, Teixiera said he was "very, very surprised" the Bush Administration was taking such a hard line with Brazil and added that in leaving the global AIDS strategy to the USTR, "we are lost on this issue."

Brazil challenges US patents code

In what many consider a retaliation against the US case against Article 68, on 31 January the Brazilian government requested consultations with the US over aspects of the US Patents Code, which Brazil believes violates the WTO Agreement on Trade Related Investment Measures (TRIMS), TRIPs and Articles III and XI of GATT 1994 (see BRIDGES Weekly, 6 February 2001).

Mwencha did not name the states set to join the FTA, but said that the trading zone will include at least 12 nations by the end of the year. The news signals progress in one of the three principal areas identified as challenges for COMESA in Mwencha's report to the sixth summit, namely to attract more countries to the COMESA FTA. The other two challenges are: (i) to make the FTA function more effectively so that traders and governments are drawn to its viability, and (ii) to move members of the FTA to a customs union. The meeting's draft final statement urges member states to join the FTA "as soon as possible", reiterating the goal of establishing a customs union by 2004 -- the first major step towards a common market for east and southern Africa and monetary union in 2025. The calls for a customs union were also echoed by Egyptian President Hosni Mubarak who predicted that "the realisation of free trade among our countries will ultimately benefit all of our people".

In a bid to protect member states' interests, the statement furthermore calls on the COMESA to adopt a unified stand over issues to be discussed during the upcoming WTO Ministerial Conference in Doha, Qatar. The draft statement also encourages members to implement the schedule on removing non-customs barriers hindering the movement of trade between COMESA members and the outside world. In addition, it exhorts floating proposals to enhance investments in the private sector and recommends the establishment of a regional investment agency as a nucleus for enhancing inter-COMESA investments.

In terms of implementation of the FTA, Mwencha's report recommends that the COMESA secretariat deal with issues of rules of origin, issuance of certificates of origin, unfair trading practices and accusations of dumping. The report states that a proposal is being forged for development of a regional competition law and policy to address anti-competitive practices. Member states are urged in the report to participate in establishing a special fund for cooperation, compensation and development for tackling special problems arising from the regional integration process, including under-developed product sectors, balance of payment difficulties, and increased macroeconomic spending.

FAO calls for greater emphasis on food security

FAO Director-General Jacques Diouf called on the members of the African trade bloc to "give fully-fledged priority to food security in national policies". "We need to make sure in the priorities and policies of COMESA countries the problem of food security will be a prominent element," he said. He added that food insecurity affects a higher proportion of the population in Africa than that of any other continent. The FAO has set a target of halving the number of under-nourished people in the world by 2015.

With a recent increase in membership from the accession of Egypt, Kenya, Malawi, Sudan, Zambia, Zimbabwe, Djibouti, Madagascar and Mauritius, a total population of the around 380 million, and intra-regional trade among members totalling USD 2.4 billion, COMESA is classed among the big, multipurpose groups. It is thought that the complete cancellation of customs fees on imports and exports within COMESA would increase the volume of commercial exchange and contribute to meeting the COMESA's stated target of USD 4 billion volume of trade. Other major economic blocks that aim to accelerate Africa's industrialisation and growth include the Economic Community of Western African States (ECOWAS), the Economic Community of Central African States (CEEAC), the Southern African Development Community (SADC) and the Arab Maghreb Union (AMU).

US Trade Representative Robert Zoellick met on 5 June with Chinese Trade Minister Shi Guang Sheng in the lead-up to the APEC meeting to discuss the status of China's 14-year bid to accede to the WTO. As BRIDGES Weekly went to press, officials reported that although the meeting ran longer than scheduled, no progress had yet been made. China's levels of agricultural subsidies remain the main impediment to China's entry. The US wants Beijing to limit its level of subsidisation to five percent of total production, while China insists that it should be allowed to subsidise at a level equal to ten percent of total production, a provision permitted other developing countries in the WTO. The bilateral meeting follows President Bush's announcement that he intends to renew China's Normal Trade Relations (NTR) status this year, a prerequisite for China's accession to the WTO.

A fresh round of talks on China's admission to the WTO has been set for 28 June through 4 August, WTO officials said Tuesday. APEC members are: Australia, Brunei, Canada, China, Chile, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the US and Vietnam. APEC's members generate 60 percent of world output and half of global trade.

BRIDGES Weekly will report further on the 6-7 June APEC meeting in the next issue.

In its communication to the Council (IP/C/W/280; available on the WTO website), the European Communities (EC) examine the relationship between the provisions of the TRIPs Agreement and access to medicines. The submission outlines recent EC initiatives in this area, including the European Commission's Programme of Action -- endorsed on 14 May -- targeted at combating the major communicable diseases (see here).

Regarding the relevance of intellectual property, the EC recognises the importance of IPRs as a stimulus for creativity and innovation, but also acknowledges recent criticisms that the TRIPs Agreement stands in the way of "developing countries' efforts to implement an effective public health policy". The EC expresses willingness "to engage in a positive manner in discussion", in particular regarding, though not limited to, issues addressed in the submission, including compulsory licensing (Art. 31, i.e. governments can allow the use of a patent without the consent of the patent-holder in certain cases), exceptions to patent rights (Art. 30) and protection of undisclosed information (Art. 39.3).

The WTO has recently come under strong criticism for allegedly impeding developing countries' access to cheap drugs by protecting pharmaceutical patents (see BRIDGES Weekly, 20 February 2001). International outcry has focused in particular on a court case brought by a group of pharmaceutical companies against the South African government over a law that would allow the country to import cheaper drugs allegedly in violation of patent rights (see BRIDGES Weekly, 24 April 2001). After the case was eventually withdrawn, attention then shifted to an ongoing US-Brazil dispute over Brazil's IPR regime, which Brazil claims is an integral component of its comprehensive anti-HIV/AIDS strategy (see BRIDGES Weekly, 8 May 2001).

Derestricted submissions to the TRIPs Council are available. Additional EU documents on IPRs and access to medicines can be found here.

WIPO/WTO initiative for LDCs

On 14 June, WTO and WIPO launched a joint initiative to support developing countries, in particular LDCs, in their efforts to effectively use IP as a tool for technological advancement, economic growth and wealth creation. In a joint communication, WTO Director-General Mike Moore and WIPO Director-General Kamil Idris underlined their organisations' commitment to help LDCs comply with the TRIPs Agreement on time and to use the IP system to promote their development. The initiative will build on existing cooperation, and on each organisation's own technical assistance programmes. Technical assistance will be provided for preparing legislation, training, institution-building, modernising IP systems and enforcement. All LDCs will be eligible under the initiative.

Specifically, discussions focused on the general principles of the TRIPs Agreement, in particular the extent to which Articles 7 (Objectives) and 8 (Principles) of the Agreement allowed countries to meet their public health objectives. Members furthermore addressed the degree of countries' flexibility when issuing compulsory licences (Art. 31, i.e. governments can allow the use of a patent without the consent of the patent-holder under certain conditions), including compulsory licenses issued for import rather than local production by smaller developing countries that do not have the capacity to work the patent. The degree of flexibility was also raised in relation to parallel imports (i.e. allowing the government to obtain a patented drug more cheaply from foreign suppliers rather than from the manufacturer's local subsidiary).

Submissions addressing access to medicines were received from the European Communities (IP/C/W/280; see BRIDGES Weekly, 19 June 2001) and a group of around 50 developing countries, including the African Group (IP/C/W/296). The latter paper stressed that the special discussion at the Council was not a "one-off event", but rather part of a process, including the next WTO Ministerial Conference in Doha, Qatar, in November.

Regarding compulsory licenses, the submission by the group of developing countries stated that Members are free to determine the grounds upon which to issue compulsory licenses, adding that "nothing in the TRIPs Agreement will prevent Members to grant compulsory licenses to supply foreign markets". The submission also demanded that Art. 6 (Exhaustion) "should be implemented in such a way as to ensure the broadest flexibility for Members to resort to parallel imports". While generally favouring discussions on differential (or tiered) pricing, they should not be covered by TRIPs nor be used to limit the flexibility of the Agreement. The paper furthermore calls on the Council to consider extending deadlines for developing and least-developed countries regarding the implementation of TRIPs. In addition, the paper addressed in more detail issues related to compulsory licences, parallel imports, differential pricing, and possible extensions of transitional periods for developing and least-developed countries.The TRIPs Council will continue discussions on this issue, but "in a

more structured and systematic way," said TRIPs Council Chair, Boniface Chidyausiku. Specifically, the WTO Secretariat will compile a checklist of all relevant TRIPs provisions and issues identified with them; the Chairman will hold an informal meeting on 25 July; and a full day (19 September) will added to the next TRIPs Council Session (20-21 September) for formal discussion. In the longer term, discussions are likely to develop along either of two tracks, according to one WTO official, namely as part of the preparatory work for the Ministerial Conference in the General Council, leading to a political statement within the Doha Declaration; or a legal interpretation of the Agreement's relevant provisions within the TRIPs Council.

Non-governmental organisations (NGOs) generally welcomed the meeting as an "opportunity to shift the balance of global patent rules in favour of the public interest and the protection of public health." In a joint statement signed by over 100 NGOs (available here), they called on WTO Members to, inter alia, strengthen the existing public health-safeguards within TRIPs, and adopt a pro-public health interpretation of the Agreement.

The TRIPs discussion on access to medicine is only one of various recent developments on this issue, in particular related to HIV/AIDS, including the now settled court case brought by a group of pharmaceutical companies against the South African government over a law that would allow the country to import cheaper drugs allegedly in violation of patent rights (see BRIDGES Weekly, 24 April 2001) and most recently the Brazil-US settlement regarding the US challenge to the Brazilian IPR regime at the WTO (see related story, this issue).

Submissions to the Council on access to medicines, a summary of the meeting and other relevant documents are available on the WTO website.

27.3(b) and geographical indications also on the agenda

Members during the remaining week discussed the usual issues related, inter alia, to review of Article 27.3(b) and geographical indications (GI). Switzerland (IP/C/W/284; available online) and Norway (IP/C/W/293) submitted papers on the review of Article 27.3(b) (exclusion from patentability). The Swiss submission proposed that the review should focus mainly on "the scope of exclusions from patentability" as set out in the first sentence of Art. 27.3(b), and on appropriate sui generis systems for plant variety protection. In addition, the Swiss paper stressed the importance of IPR protection for biotechnological innovations. The submission also followed up on an idea previously raised by Switzerland in the TRIPs Council of setting up a database for traditional knowledge (TK) related to genetic resources.

The Norwegian submission stressed that there was no apparent conflict between the Convention on Biological Diversity (CBD) and the TRIPs Agreement, but acknowledged the complexity between access, transfer and benefit-sharing and the IPR regime which that paper said should be further looked at. Norway also expressed its willingness to consider whether provisions requiring disclosure of origin of genetic resources should be inserted into the TRIPs Agreement in order to implement the CBD more effectively. The Council will continue discussions on Art. 27.3(b) at the next Council meeting.

Regarding geographical indications, a new joint submission was received from Argentina, Australia, Canada, Chile, Guatemala, New Zealand, Paraguay and the US (IP/C/W/289) on the implications of extending GIs to products other than wines and spirits, which highlighted the potentially high costs for administration, producers and traders; the possible misuse of GIs for protectionism; and likely customer confusion if terms traditionally used to describe products disappear. The Council will revert back to the matter at the next meeting. As trade sources pointed out, discussions on GIs appear to have reached a stalemate, which Members are unlikely to resolve before the next WTO Ministerial.

In its report, the panel concluded that "by far the main beneficiaries of trade liberalisation have been the industrial countries," adding that developing countries continue to be confronted with significant barriers in developed country markets. To address this problem, a new round of trade liberalisation talks should be launched at the next WTO Ministerial "with the principal objective of fully integrating the developing countries into the global trading system". This "Development Round" should focus, inter alia, on the implementation of the Uruguay Round commitments by industrial countries; trade liberalisation in agricultural products; elimination of trade barriers in manufacturing (in particular textiles and clothing); and considering the possibility of introducing rules governing the temporary movement of labour.

Special support for LDCs

The panel concluded that LDCs "cannot wait for the outcome of a new trade round". To deal with their immediate needs, the panel therefore recommended increased financing efforts for the Trust Fund established to implement the Integrated Framework for trade-related technical assistance for LDCs (see http://www.ldcs.org); immediate implementation of Uruguay Round commitments, particularly in products important to developing countries such as textiles; the prompt implementation of the EU 'Everything but Arms' initiative (which will grant 48 LDCs quota- and duty-free access to the EU market with phase-in periods for sugar, bananas and rice; see BRIDGES Weekly, 30 January 2001); and the restoration and improvement of the International Monetary Fund's Compensatory Financing Facility.

Systemic reform

The panel also concluded that the WTO was "in urgent need of reform and support" which was "unlikely to be achieved from within". In particular, it recommended that Members should address the decision-making system, rightly perceived as "selective and exclusionary" by many developing countries; technical assistance to facilitate developing countries' participation in multilateral trade negotiations; and the problem of underfunding and understaffing. The International Labor Organization (ILO) should be strengthened to address labour standards, while environmental issues should be dealt with by a "Global Environment Organisation" which would integrate the various organisations currently sharing policy responsibility.

The panel report -- which will be considered at the resumed third session of the UN Financing for Development preparatory committee meeting on 15-19 October -- is available online here.

Talks on the EU-Chile FTA are expected to proceed more rapidly than the EU-Mercosur negotiations, since the agricultural products are not the key sector in Chile-EU trade relations (counting nearly 20 percent of Chile's export to EU, compared with 40 percent exports for Mercosur). According to one trade analyst, Chile would represent the most important Latin American door to Asia for the EU.

Mercosur members include Argentina, Brazil, Paraguay and Uruguay, with Chile and Bolivia as associate members. Venezuela (which is already part of the Andean Pact) has recently applied for joining the trade bloc.

One industry spokesperson pointed out the need to move away from focusing exclusively on patents as the obstacle to obtaining medicines, and compulsory licensing and parallel imports as the only solutions, towards addressing other constraining factors, such as lack of financing and inadequate infrastructure. Compulsory licensing enables governments to allow the use of a patent without the consent of the patent-holder under certain conditions, while parallel imports allow governments to obtain a patented drug more cheaply from foreign suppliers rather than from the manufacturer's local subsidiary. Some NGOs, however, questioned the reasons behind the industry's strong resistance to greater flexibility in the TRIPs Agreement, especially in African countries whose market share in pharmaceutical products is extremely low.

Agriculture

In a session well-attended by NGOs, discussions on agriculture mapped closely the debates currently underway in the ongoing WTO agriculture negotiations. For many, the multifunctional nature of agriculture production had to be maintained in order to address the non-trade concerns -- rural development, food security and environmental protection -- of specific societies. For others, the inefficient use of resources associated with excessively subsidised agriculture, primarily in Europe and the US, should be curtailed so that countries with comparative advantage in agriculture production can fully benefit from the trade system. Interventions from several developing country NGOs pointed out that in absence of special and differential treatment, developing countries would continue to suffer from inadequate agriculture systems. One US-based NGO drew attention to the power asymmetries in world agriculture trade, arguing that large private interests distort commodity markets and benefit the most from state support. Accordingly, it was argued that more effective domestic and multilateral competition policy is required to re-balance these power asymmetries.

WTO & civil society

At the meeting on WTO and civil society, participants indicated that substantial asymmetries continue to exist between Northern and Southern NGOs in terms of their expertise and resources. Long discussions on capacity-building revealed that no consensus existed on the meaning of this term. In her concluding remarks on 'WTO and institutional reform', Chair of the civil society sessions Dr. Sylvia Ostry from the University of Toronto reported that strong concerns were raised about the transparency and inclusiveness of the WTO decision-making process. "The WTO Secretariat was viewed as not being totally neutral and was seen to be acting incorrectly by canvassing a new round...these concerns reflect the marginalisation which certain developing countries feel in the WTO, and of course this is not unrelated to the capacity-building issue," she said.

A detailed report of the symposium by the International Institute for Sustainable Development will be available at the end of this week at: http://www.iisd.ca. Summaries of the different sessions will also be available on the WTO website shortly (see: http://www.wto.org).

Note that sixteen findings of fact summarize this essay on pages 45-46 below. Readers are asked to study them before finishing this essay. Editor's note: They are also available on the web at http://cookreport.com/10.06.shtml

Let's begin the journey that has brought us to these conclusions.

As the "smoke" clears, serious issues exist, both at the application and the infrastructure levels. Above TCP/IP, at the application layers we have the Microsoft death star slugging it out with the AOL-Time Warner death star. Huge vertically integrated, would be monopolies of transport and content or OS and content. Not the most efficient way to do business, but because of market share, both companies have great inertia as they move forward. Control of content by those who also own the distribution channel is a serious public policy issue. If you have any doubts, see for example the statement by Scott Cleland in a June 27 Precursor Group Advisory: "Invest in the 'legal' exercise of market power. Precursor believes an investment 'sweet spot' exists with companies that have the market power to unilaterally lessen competition and raise prices, but do not abuse it to the extent that it results in serious antitrust enforcement. The best examples are: AOL-TW bundling "tele-applications" like instant messaging; cable integrating vertically into broadband services and content; . . . ; and finally maybe Microsoft bundling "tele-windows" applications into XP."

On June 28th San Jose Mercury, Technology Editor, Dan Gilmor commented. "Microsoft and its acolytes are purring with delight today, at least publicly. But, they didn't win the overwhelming victory that you're hearing about. Not even close. From the ruling (PDF file, about 420K) by the U.S. Court of Appeals for the District of Columbia: Given the limited scope of our disqualification of the District Judge, we have let stand for review his Findings of Fact and Conclusions of Law. . . . . The court may have overturned the breakup order. But by the same unanimous ruling it accepted Judge Thomas Penfield Jackson's findings of fact and ruling that Microsoft a) has a monopoly in the relevant market; b) used unfair business practices to maintain its dominance; and c) has to be restrained from further abuses." Gilmor continues: "What Microsoft has won is time. It can continue its brutal practices for a while longer, building into Windows and Internet Explorer and Office any and all technologies that will further solidify the monopoly. It can extend its reach into new markets, using its $30 billion in cash (which grows by a billion dollars a month. The company surely figures that it'll be entirely above the law by the time the law catches up. It may work. It has so far." Ironically if the opinions of some who have seen Windows XP are correct in addition to driving a new generation of corporate PCs, its exceptional capability in real time messaging, voice (through its sip client), and video could also begin to soak up some of the industries surplus bandwidth.

This battle is also one over control. Control of the ICANN DNS root. One had better watch whether the Internet Routing Registries are arm-twisted into accepting contracts with ICANN requiring recipients of IP number to use only the ICANN root for their DNS or loose their IP numbers. If ICANN wins the DNS wars we shall see the price of maintaining websites rise. We shall also likely see attempts at websites licensure. To the extent that these issues are all entwined with moves by conglomerates who see their intellectual property threatened by the Internet to build safe controllable distribution channels, the rest of us need to be afraid. Walled Gardens are indeed being built to minimize the possibility of the linking of opinion and speech beyond what the concentrated corporate global media are willing to allow.

Moving down to the infrastructure level, we must realize that the "nethead" versus "bellhead" dichotomy may have outlived its usefulness. The bellheads have spent billions on building their own IP networks. A sober look at reality says phone companies will not turn into stupid network Internet companies over night as their only path to survival. The are doing quite well as phone companies thank you. In fact, how well they do seems based, more and more, on the facilities that they own. Every telecom player has built TCP/IP data networks and in this respect is playing in the internet game. Depending on its customer base, one companies network will be structured a bit differently from that of its competitor. But contrary to the expectations of some pundits, its hard to see any "pure" internet plays out there. Hard as Level 3 and a few others tried, the PSTN was simply too big to swallow. Everyone had access to both Internet (nethead) and circuit switched (bellhead) technology and everyone used that access.

No Longer Internet Versus Telco

Despite the protestations of folk like George Gilder, there is no longer any such thing as technology that is inherently "right" for use by "netheads" and different technology, the choice of which condemns "bellheads" to abject failure. For example, gigabit Ethernet versus SONET. Since products first introduced by Cyras and Cerant in 1999, the cost curve of SONET for lighting new fiber pairs is way down and performance substantially increased. (Much more about this in next month's issue.) SONET is more likely to be used by the "bell heads" simply because of who their customers are and experience gained in operating their voice networks. Rather than a tool chest of ideologically right or wrong technologies, what we have is the ongoing development of a general tool chest of transport technologies that is delivering astounding increases in available price performance for moving bits. Telecom providers' choices of tools from the tool chest are governed by their understanding of who their customers are, what their geography of service for those customers is, and whether or not they own the physical fiber on which they will deliver the bits.

It no longer makes much sense to think of Internet versus telco. Business model and approach is determined by the mix of facilities owned. Plans to force the sharing of facilities simply haven't worked. The last two or three years have taught us that ownership of the physical transport media is likely to be the major determinant of architecture and characteristics of one's network. The Internet began as a collection of voluntarily interconnected private networks. There was no single owner of the Internet and no one to establish top down rules as in the case of phone companies with their vertically integrated infrastructure that was centrally managed and controlled in the manner of the 19th century railroads. However, the multiple national and metro fiber nets that have been built since 1995, have been perhaps just as expensive to build as the railroads of the 19th century.

This infrastructure was built quickly on what turned out to be the myth of Internet time as well as bandwidth. Build it and the customers would come. The problem was that suddenly you had the carriers building data networks to sell to enterprise customers that were to a varying extent subject to ILEC control in the local loop. You had the new Greenfield players going after the same business market. The question was how would these businesses go up against the local loop. Some like Level 3 and Metromedia tried building their own local loops. Trying to do some reasonable portion in five years of what the ILEC had done over a century, they went deeply in debt.

Others with business plans in hand sold policy makers on the idea of the CLEC. Competitive Local Exchange Carriers were to be structured on the assumption that legislation could convince the incumbents to grant 'equal access' to competitors. We now have had five years of experimentation with the theory that local loop competition is obtainable by forcing the owners of the local loop to enable competitors to sell access at the IP layer and above. Such was the CLEC idea. By the summer of 2001 the CLEC concept of competition has crashed and burned.

The ILEC is more entrenched than ever in the local loop. Companies like Next Link were supposed to bring competition at least to office buildings in its metro markets. Instead it is deep in debt and cash strapped and will likely soon be joined by Yipes!, Telseon, and Sigma rushing into metro markets where owners of the fiber itself such as Metromedia Fiber Networks and Level 3 are ready to sell against them.

What one has therefore at the transport level are the ILECs as firmly entrenched in the huge PSTN as ever. Some business CLECs are still trying to compete for enterprise services against the ILECs. The old line carriers are being squeezed in the middle as new competition drains their long distance voice revenues and everyone joins in a throat cutting frenzy of using fiber, wireless and even copper to bring broadband to the enterprise. Welcome to the chaos of the 'free market." A structure that can't sustain itself has been created. As it sorts itself out the critical public policy questions will be first whether government does anything to maintain open and equal access to physical rights of way. The second critical issue will be what policy does to move toward enabling customer owned networks.

How the Internet Arrived at Its Current Position

Over the last decade the technologists have who have created the internet revolution have carried Moore's law into telecommunications for the first time. Although for political and structural reasons, prices do not yet reflect this, they have given us technology that could bring a gigabit of bandwidth into every home school and business in the nation for $100 a month. They kicked off an enormous speculative frenzy that is now in the process of collapsing. The irony is that after a trillion dollars of investment the difference that has been made in our lives may be turning out to be relatively trivial. The greatest revolution in the history of telecommunications that came in with a roar six years ago looks to have been rendered impotent by a combination of political and ideological short sightedness. The technology is there. The fiber is there. The tools to deliver the bits are there. There's only one small problem. They are for the most part tantalizingly out of reach. The ILEC local loop monopoly in the wake of a grand failure of public policy stands unchallenged. For some the thought that the ILEC may soon provide long distance is seen as heralding a return to the pre 1984 monopoly.

The internet revolution has led us to this state of affairs where over the ILEC ramparts we can just make out our promised broadband Nirvana. It is cordoned off in fiber rich trenches belonging on a national scale to perhaps two dozen fiber network companies who bet the bank that if they only borrowed enough, they could obtain first mover advantage and build a global infrastructure that they could control. Having grossly overestimated the growth of demand for Internet bandwidth, they borrowed billions to enable themselves to meet the size of the most expansive reality they could imagine. With everyone racing to grab the free riches of their new start ups' IPO, it became in the interest of each new entrant into the field to maintain the myth of bandwidth demand because then there would really be room in the marketplace for them as well. Everyone did it because everyone else was doing it and - for a while - they got away with it.

In the US a lack of regulation left freedom for rapid technology evolution. It also made gathering of information across the industry difficult enabling perpetuation of the bandwidth myth. Isenberg's analysis of the Stupid Network in the summer of 1997 was 'spot on.' But, while it spoke the truth, it also helped to nurture an unhealthy arrogance among the Internet faithful. One which said that since the cost of building and operation of the stupid network was 100 times and eventually 1,000 times less than the money needed to power the intelligent network, the stupid network would inevitably drive the intelligent network, wedded as it were to the preservation of its antiquated copper local loop, out of business. The figures were writ large said the net heads. It was time for the bell heads to realize they were the dinosaurs and obediently die. The detachment from reality was profound. Even as PSI was sinking under a billion dollars of freshly accumulated debt, Bill Schraeder, PSI founder and CEO allegedly told his December 2000 Christmas party that the company that would collapse and go out of business long before PSI did was AT&T. Possession of the politically correct technology, Internet technology, was thought by the net heads to be the requisite ingredient for success. The libertarian philosophy that ran strongest through the net heads reassured them that their Internet was not regulatable nor controllable. Lawrence Lessig in his seminal 1999 book, Code and Other Laws of Cyberspace argued persuasively to the contrary. Most did not listen.

It was the bell-headed dinosaurs who in the end turned out to have a political intelligence that has trumped the netheads. The national infatuation with what lobbyists portrayed as a free market gave us the 1996 Telecom Deregulation Act. Restrictions on combined ownership of transport and content and on ownership of telecom broadcast and print media in geographic markets were thrown out in exchange for a baby bell promise to allow competitors access to their networks. The act created whole new families of jargon. RBOCs became ILECs to distinguish themselves from the newly arisen and supposedly nimble CLECs. No one chose to notice that the freedom given the guardians of the local loop was the freedom to merge and use their guaranteed rates of return to buy each other up. The net heads had no guaranteed rates of return. They had instead a blind faith that their technology was so disruptive that it would sweep everything else away. They seemed not to notice that they had had to do such things as gain access to DSLAMs under the physical control of their ILEC competitors in order to give acceptable service. They seemed to believe that the ILECs really had no choice but to sit back and watch the CLECs eat their lunch. Northpoint is gone. Covad is on the brink and what broadband Internet has reached American homes is primarily from the Cable companies. Eight RBOCs have become four giant ILECs with legal and lobbying staffs and boundless flows of money to point the finger at the foolish net headed Internet innovators.

Barred from long distance, with the help of Al Gore and Jay Rockefeller, the ILECs made their shrewdest move in the 1996 Telecom Reform Act. The emergence by then of the first two to three thousand independent ISPs demonstrated that barriers to entry into the internet flavor of telecommunications at the edge of the network were low. Given the libertarian bent of the times one of the most remarkable triumphs of the bell heads was their successful passage through congress of a government controlled program straight out of the best socialist traditions of the 1960s. The Schools and Libraries Corporation was created and merged with the remnants of the universal service fund with the task of making sure that all of Americas public schools and libraries had access to the Internet. Although the enabling legislation made it very clear that the means of connection to the Internet that this tax would support was to be technology neutral, the RBOC-friendly legal staffs at the FCC were able to implement a fix. As Dale Hatfield who was the Director of the FCC Office of Engineering at the time told me in June of this year it was the FCC's own lawyers who looked at the legislation and assured the FCC's technologists that the legislation gave the FCC no choice but to restrict the use of the funds to buying local wireline connectivity services, year after year after year. Spread spectrum wireless radios that could create an infrastructure independent of the ILEC local loop were forbidden.

With a single flourish of the pen the ILECs were handed a new local tax that now exceeds 8% on every phone bill, business and residential in the United States. Starting at just over two billion a year, the SLC is now pouring more than four billion a year almost entirely into ILEC coffers. The massive paperwork required to receive funds from this huge bureaucracy has meant that few small locally-owned or community-based ISPs have managed to receive any of the subsidies for connecting schools. What the program has done is taken control of local school and library internet connectivity away from the communities that pay for it and delivered it into the hands of a federal bureaucracy where congress with requirements for filtering software reduce all local standards to the lowest national common denominator. Unfortunately, few understand how the SLC has defrauded them by removing from the community's control what the community is paying for anyway. Moreover the program distorts the market by incentivizing the local communities to utilize the ILECs (to the detriment of community-based providers) while it provides national subsidies for ILECs to further amortize their obsolete copper infrastructures and learn the internet business. It forces all Americans to provide a second subsidy to the ILEC's copper local loops. In doing so it ensures that the United States will never be able to repeat the condo fiber build pioneered by the Canadians. It ensures that local taxes enforce remote stock holder guaranteed rates of return instead of enabling local communities to buy or build their own locally owned and controlled fiber infrastructure.

Cisco pares 20% of its work force, Lucent teeters on the edge of bankruptcy. Nortel sheds 30% of its work force and ties General Motors for the largest quarterly corporate loss in history. The makers of the hottest new optical transport technology are on the ropes. Level 3 lays off 25% of its work force and Global Crossing losses 50 percent of its value in less than a week. We are downing in a glut of unlit fiber and suddenly unsalable 'new and wonderful' Internet transport technology. We may be on the edge of a 500 billion dollar fire sale of net head Internet technology.

On the Edge of a Fire Sale?

The stark question that may soon be asked both here and in Canada is who will be allowed to buy? Who is able to buy? For the last 3 to four years the Canadians have had a ready answer. Their schools and municipal governments, through a fortuitous combination of services, have been building customer owned dark fiber nets. Canada's national policy has been well preparing its citizens for what they now face. An era of customer-owned and operated networks. American policy on the other hand has left us with an infrastructure where, when the fire sale begins the ILECs, with their guaranteed rates of return, are likely to be the only ones with enough cash to purchase and then hold what they have bought off the market to ensure that they enjoy another 20 years amortization on their copper loops.

We might fantasize that, if we were actually capable of enunciating a public interest in Washington DC, lawmakers might craft a means to return the school and library fund taxes to the local citizens who pay for them and provide some guidance on how local communities could select and acquire the most advantageous and appropriate solutions for their communities instead of having everything go to the ILEC and its distant stock holders. The only problem is that, unless they could be found among local ISPs, we may not have local technology leaders who have the potential ability to help local communities carry out their march to local telecommunications independence. We were developing them within schools and within local ISPs before the SLC inserted the ILEC fifth column into our communities. If we look for leadership nationally we may find that missing as well. We might hope that the pending five year review of the Schools and Library Corporation would provide an opportunity for congressional inquiry into the current situation.

The Internet revolution has come and, in the absence of intelligent public policy, it may have already gone. It has created a tremendous burst of innovation. A burst that now looks to have been mismanaged to the extent that the people who did the least to advance the new technologies seem most likely to control them. We may be left not with the edge-controlled intelligence of the Stupid Network but with the central authoritarian control of the likes of AOL Time Warner owning the content and leasing the conduit from "ma bell," while together they carefully plan to influence public thought and "monitize" every customer minute. This happens while Microsoft plans to use its OS monopoly to let it insinuate its software into controlling all our personal data while charging us a monthly rental fee for what we used to own and control ourselves. Divestiture of the ILEC local loop is an attractive looking answer to our problem. But Verizon with its political muscle has just killed that in Pennsylvania. In the absence of an extraordinary upheaval, the bell heads may well have won.

Is Public Policy About to Become as Important as Technology?

Given the situation that we have just described, it seems increasingly inevitable that we are facing two choices. The imposition on telecommunications in general and the Internet in particular of the centrally owned top down telco controlled model where everything is run via central authorities like a vertically integrated railroad. Under such a model the demand for profit by those exercising the central control will stifle any further serious innovation. This is the current situation in the United States. It stands in stark contrast to the direction that Canada has just outlined for itself in its new National Broadband Task Force Report.

We have argued before that locally owned infrastructure free to be run by local schools governments and research institutions with continuing innovation of the internet protocol and tool set is for the national and global economy in the 21st century what the interstate highway system was in the middle of the 20th century for the US. Tim Denton and Francois Menard two of Canada's leading netheads understand this very well.

What they enunciate below in a few short paragraphs is a description of why the internet is fundamentally different from the telephone system. This difference is overwhelmingly important and it is understood by almost no one in the United States where the libertarian fundamentalists have allowed the debate to be framed in terms of free market success and failure. The result is that the older, wealthier forces of the centrally top down controlled telephone system are in command and in control of access. In the US public policy is subsidizing the ILECs through the SLC tax to put schools and libraries on the internet. Public policy instead needs to be enabling community control through finding ways to make community ownership of local networks feasible.

For several years - especially in Canada the debate has been over open access to carrier owned facilities. In the United States this debate has rarely made it out of the barrel of specialist think tanks or lobbyist cabals. The debate has simply never reached the level of general public awareness. Experience has begun to convince those who have fought to define public access as mandate to be able to attach devices directly to carrier owned fiber that - short of a network of government financed inspectors and enforcers - access to facilities owned by others is simply unworkable. There will always be things that the carrier owner will do to favor its operation of its own physical media above that of everyone else. With facilities ownership the storied "level playing field" is a pipe dream.

The concept of customer owned networks is just beginning to come into focus. Therefore it is not yet possible to point with certainty to any set of preordained outcomes. We may watch what is happening in Canada and see that more and more bandwidth at prices far cheaper than the carries can provide is an integral part of the equation. Edge control and local experimentation will be enabled. For example, if a municipal network owns its own fiber, it will have its own set of customers who come to it because it will be able to provide a service of a kind that ILECs, carriers or IXCs find it uneconomic to provide. Customer owned lambdas more over will enable users to waste bandwidth and do things that are not feasible in the commercial world of companies struggling for enough customers to pay the interest on their bonds.

Such customer owned networks will have to provide their own operations staff and assume responsibilities that many other customers of commercial networks would not want to do. One danger of the current consolidation is that the will likely be fewer clueful local ISP staff to assist in operation of new local public network. Oc course they could outsource to those local universities whose staffs have a clue. Unfortunately those universities are generally in Canada. In the US we have Internet 2. Like the schools and libraries corporation, Internet 2, in the name of subsidizing meritorious bandwidth usage, has primarily helped to offset the cost of high speed pipes from the traditional telcos. Research and development on spreading the deployment of broadband and making it cheaper has never been a serious concern within Internet 2.

At the most fundamental level, we maintain that public policy must begin to address the question of moving access to the physical network level. In other words it must decide how to deal with those entities wishing to build customer owned and operated fiber networks. Aside from the current severe problems of the industry, the motivator for these actions is the fact, as we have seen, that many of the private owners of buried fiber may not be able to meet the interest payments on their debt. It appears likely that we will offered a short window in time to build a customer owned distribution and access system that will use new transport technologies not yet viable in the commercial network. We maintain, that we should take as our model something like the individual ownership model enabled by the federal home mortgage agencies. Yes, it *is* time legislative bodies in North America, Europe and the rest of the world to offer their citizens an alternative to the alarming concentration of media and transport that they have just given to the corporate titans. The US Congress has an opportunity to show the rest of us that it has individual constituents. It must build an insurance policy to maintain individual rights. It must recognize that small scale edge controlled publishing is in danger. It must realize that edge controlled entrepreneurship enabled by the rise of the Internet is in danger. It must show that it cares about small business as much as AOL Time Warner. If it is not to preside over the final demise of deeply held beliefs that the individual is sovereign, it must give the rest of us an opportunity to launch a lifeboat. It must ensure open access to physical rights of way and enable the edges to experiment with alternative models to the corporate Walled Gardens being built to fence the rest of us in.

It must do this because we made an important choice in this country for individual ownership and local community control of the important physical necessities critical to the local economy. For example, housing, cars, telephones and local highway systems. It has been our economic preference and it is a wise one, that individual ownership stimulates and local control generates far greater economic incentive and economic activity and much higher gross national product than does central economic planning at the national level. By far the more robust choice is to enable the end user to own and be responsible for as much of the physical system as is possible and doable. It may be that local stock companies arise in the way that local water and electric companies exist where only those directly served by the compa ny are shareholders. In any case it is crucial at this singular window of opportunity to find the political will to empower our traditional American model of individual ownership and individual responsibility for as essential property as possible. It simply works out better in the long run for our national prosperity and social order. But, given that national and even international scope of the problem, action by our Federal government will be necessary to enabling positive community action.

The question becomes one of whether the government in the US or in Canada steps in with a policy to enable small businesses or local communities that want to buy fiber to operate their own networks to do so. We could design a national fiber bank set up to guarantee payments to cash strapped national fiber networks that sold fiber strands to local governments, schools, hospitals or even businesses that wanted to operate their own networks and interconnect with each other in the manner of the internet. Given that the government has enacted a four billion dollar plus aid package for the incumbent local exchange carriers in 1996 in the form of the national schools and libraries bureaucracy, it doesn't seem to be too much to do to ask it to make possible entrepreneurship on the part of local communities, including community ISPs. It can do this by taking the user taxes now collected from local communities and given to the new handful of mega ILECs and initiating programs that reward those who want to become entrepreneurs within their own community via the building of customer owned networks.

Doing this would not only provide a means of stabilizing the current chaotic market. Doing this would also set up a very healthy local market and resale structure of local communication networks and channels through local resellers who look to a federal loan guarantee and standards agency modeled after FHA or FreddieMAC, for instance. Very few would argue that local housing should be better served if sales and rentals were managed from the corporate headquarters of giant monopoly national and international corporations. By opening up the possibility of community control, would also help to ensure that diversity of telecommunications content is maintained. The government would merely enable liquidity in the bandwidth and fiber market and in so doing would also enable continuing edge controlled innovation.

The Canadians Understand

In Canada the Canadian government is completing the build out of the new highway system with a requirement of open access to fiber highways built at least in part with public money. Blind obedience to the idol of the "free market" in the United States is resulting in the exportation of leadership in the foundations of Internet technology to Canada. The short article below explains very clearly what is happening.

The Broadband Task Force Report Votes for the Internet

By Timothy Denton and François Ménard June 20, 2001

On the 15 th of January 1991, Tim Berners-Lee made the World Wide Web program free for anyone to pick up, and thus began the revolution that made the Internet a household word. He did not need the permission of the owners of the Internet to make it available for free to everyone. There are no owners of the Internet. Just like the English language, it is available to all who wish to use it. At its core, the Internet is an Esperanto for computers.

The most important fact about the Internet is that no one can tell you in advance what you can put onto it, just as no one censors novels before they are written. The creators of e-mail and web browsers, together with the web itself, did not need to ask anyone's permission. New music sharing formats (Napster and Gnutella) are out before the copyright interests can stop them. Being an open standard, a common language, the net allows new services because no one has to seek the permission of anyone to innovate. This openness presents a fundamental challenge to the legacy systems of telephones and cable television. They run on the principle that the owners of the networks define what services are. They are highly specialized for a very few purposes, whereas the Internet is a general language enabling computers to communicate packets, without specifying what they are to be used for. No one owns that language; it is shareware. The best analogy of the Internet to the telephone or cable systems is the contrast between highways and railways. The owner of the highway does not determine, beyond very broad limits of weight and size, what shall travel on the highway. No one files a flight plan; you get on and off as you choose. No one exercise central control over traffic, with the result that there are crashes and traffic jams. Drivers coming on traffic jams re-route themselves. The same applies packets on the Internet.

Railways require central control. The path and movement of trains are centrally managed. The owner of the railbed owns the cars that travel on it, or has strict rules of interconnection with other railways to pass traffic. You cannot put rail wheels on your car and get on the track. The ideal of the railway, as with the phone system, is a completely pre-specified result: telephone calls go through. It is highly conservative to change because the whole is engineered for a narrow set of purposes. Not so with the Net. The chief fact enabling innovation on the Internet is that the owner of the transmission path does not own or control the vehicle (application) that uses it. This has allowed creators to innovate and people to select what will succeed or fail.

The National Broadband Task Force, which published its report a few days ago, had a choice before it: whether to extend the old model, or opt for the new, where the users of the network rather than the owners define what services will be. To their great credit, they have opened the door to the new model.

At the back of the report (http://broadband.gc.ca/english/index.html) is the key recommendation. It says that, for any build-out of a network employing government funds, there must be what is called "open third-party access", and more important, it specifies what is meant by that term. A third party is you or me, and by defining the terms on which people can get onto the network, they are establishing the bill of rights for people to use the networks of the future.

Among those rights were: The owner of the network cannot knowingly plan for a limitation in the types of services which could be offered to other service providers or end users; · End users could freely choose among different service providers; · Neutral meeting points have to be provided. (http://broadband.gc.ca/Broadband-document/ english/appendix_g.htm)

This is the adoption of the Internet model. Open access permits innovation without permission. It stands as a remarkable advance in government policy. It puts Canada well ahead of the United States, where federal lawmakers are proposing to entrench the old model in a new telecommunications bill, at the request of the telephone companies.

There are reasons to think this Internet-friendly model could be thwarted. Canada has adopted open-access policy before, in the case of cable television, and four years later we have still made no real progress in defining what it could mean. In this case, however, there is reason for hope: with the right conditions set down from the beginning, new Broadband Task Force Votes for the Internet. It decrees that new networks can be built on new principles, and avoid the constrictions of the legacy networks.

Anyone who appreciates what a difference the Internet has made in their lives should encourage the government to implement this part of the report. The Task Force has voted for the future. Let the government know that the Task Force recommendations on open access have the support of people who use the Internet.